|
| |
| Fixed Rate Loans |
| Interest Only Loans |
| Adjustable Rate Loans |
| Alternate Documentation Loans |
| Government Loans |
| Home Equity Loans |
|
Fixed Rate Loans
| Fixed Rate Programs |
|
10 year Fixed
20 year Fixed
30 year Fixed
40 year Fixed |
Fixed interest rate means the rate will not change for the life of the loan. The loan is protected against rising rates. |
Depending on the interest rate yield curve, a fixed interest rate is generally higher than an adjustable rate. This can result in higher payments. |
|
 |
Interest Only Loans
| Interest Only Programs |
|
Most Terms Available Fixed Loans
Adjustable Loans |
Interest only loans require a minimum payment to cover the interest due on the loan. This results in lower monthly payments and the possibility of a higher loan amount. |
Interest only feature lasts for a designated period of time. If the minimum required payment is made, nothing will be applied toward the principal balance of the loan during the interest only period. This can result in a significant payment increase after the interest only period is over. |
|
|
Adjustable Rate Loans
| Adjustable Rate Programs |
|
3/1 Arm
5/1 Arm
7/1 Arm
10/1 Arm
6 Month Arm
1 Month Arm |
Adjustable interest rate usually means a lower start rate than a fixed rate. This equates to lower initial monthly payment which in turn can help to qualify for higher loan amounts. Also, if rates decrease, the adjustments could result in a lower rate. |
In a rising rate environment, payments will increase with each adjustment. This can result in very high payments and increased risk. |
|
|
Alternate Documentation Loans
| Alternate Documentation Programs |
|
Most Terms Available
No Doc
No Income Verification
No Ratio
No Asset Verification |
Alt-Doc loans are for customers seeking a low documentation loan. Only minimal documents are required. This usually results in a faster approval. |
These loans usually require money for a down payment and a higher credit score. Additionally, the rates are generally higher. |
|
|
Government Loans
| Government Loans |
|
FHA/VA |
FHA/VA Loans are not based on credit score. Lower scored borrowers have the ability to be approved with good rates and lower payments. Additionally, gift funds are allowed in most cases. |
FHA/VA loans have very strict underwriting guidelines including the appraisal portion. A minimum of 3% must come from the borrower or gift funds. |
|
|
Home Equity Loans
| Home Equity Line of Credit (HELOC) |
|
Adjustable |
HELOCs allow for a customer to borrow just the amount needed. The payments are interest only and the interest may be tax deductible. |
The rate is variable and in a rising rate environment, the payment will go up. |
|
|
|
|